"This would affect every product and service in the country," said Daniel Jaffe, head of government relations at the Association of National Advertisers.

Despite such dire warnings, how much the policy change would affect the economy and the demand for advertising is debatable. Here's what you need to know.

The proposals
The proposal put forth by House Ways and Means Committee Chairman Dave Camp, R-Mich., in November would allow companies to deduct 50% of their advertising costs in the year they are incurred, with the remaining 50% amortized over the following 10 years. Senate Finance Committee Chairman Max Baucus, D-Mont., proposed a more palatable five-year amortization period.

Who gets hit
For large companies with big advertising budgets, the policy change would be a nuisance in the short-term but ultimately it would only delay -- not limit -- the deductibility of advertising expenses. Under the Baucus proposal, if an advertiser were to keep its ad budget flat for the next five years, it would be deducting the same amount at the end of that period as it currently does. The change would clearly increase the after-tax cost of advertising for the company in the short run, but it probably wouldn't prompt the company to slash its spending on ads.

The proposal would likely have a more significant effect on startups and small businesses for which cash management is crucial. "For dynamic companies that might be growing their advertising budgets by 10% per year or more, the change would significantly increase the cost of advertising," said Mel Schwarz, a partner in the national tax office of accounting firm Grant Thornton.

What's at stake
The tax treatment of advertising costs certainly qualifies as a potentially large source of revenue. Businesses spent roughly $140 billion on advertising in 2012 -- depending on what's included in the figure. If only half of that figure were deductible, the Treasury would have theoretically netted an additional $24.5 billion at the current 35% corporate tax rate. At a 25% tax rate, the extra haul would have been $17.5 billion. Procter & Gamble, which had $4.8 billion in ad spending in 2012, according to Advertising Age's DataCenter, would have been on the hook for another $840 million in taxes for that year.

The outlook
With Mr. Baucus poised to become the next U.S. ambassador to China and Mr. Camp likely rotating out of his position as Chairman of the Ways and Means Committee this year, it's a very long shot that the reform will come to pass.

~ ~ ~CORRECTION: An earlier version of this story referred to Grant Thornton as Grant & Thornton.